Australia has over 600,000 not-for-profit organizations, and a quickly expanding “sharing economy” (e.g. Uber, Airbnb, eBay). Most of this is under the radar of news reports. What are the signs that NFP’s and the sharing economy can become a main career path for many when automation destroys half of normal jobs Australia & America in the next few years?

Thor MayAdelaide,
2016

This page is an initial
starter list for discussing the "Disappearing Jobs " topic. The page makes no special claim to quality, and additions are
welcome.

May, Thor (2014) "The Problem of Work and the Rise of the Precariat". [precariat = precariously employed people] [essential reading to set a context for the present article]. The Passionate Skeptic website online @http://thormay.net/unwiseideas/WorkProblem.htm

1. Immoveable realities and shifting paradigms

This essay is about recognizing some irreconcilable trajectories, and wondering what comes after the singularity.

The first trajectory is the automation of activities which have engaged workers in the production of goods and services for profit.

The second trajectory is separation of the ownership of capital from investment in human resources.

The third trajectory is the separation of the ownership of capital from commitment to particular geographical nation states.

The fourth trajectory is the dissolution of individual and community belief in the will of the owners of capital to supply them with a secure and sustainable future.

The fifth trajectory is the dissolution of individual and community belief in the capacity or will of political leaders to negotiate effectively on their behalf with the owners of capital.

The sixth trajectory is the separation of the population into an internationally mobile, fairly small technological and analytical elite, able to manage the automated production of goods and services, from the largest mass of individuals for whom the complexity of the evolving civilization is simply not comprehended and is beyond their power to direct. This process has huge long-term implications. Economically it affects the heart of the consumer-production cycle since deprecated workers have less ability to buy, not only manufactures but also services. For example, tourism, a very big employer of semi-skilled labour, depends upon populations rich enough to travel for pleasure.

The seventh element is an immoveable centre about which these vectors revolve is the messy, emotional and embedded habits and abilities through which individuals come to terms with the cultures into which they are born, and through which they subvert all personally threatening change and technology. This element leads one to question to what extent possible technological substitution for human performance will actually proceed. Think of the supermarket test. I always head for the automated self-service check-out: usually a fast, no-fuss exit. ThenI look at the patient queues lining up to be served manually by a checkout girl, and wonder ….

2. A departure for shores unknown

I think back to my recent ancestors in the early 19th Century, walking up the wooden gang plank of a small sailing ship in Portsmouth, England, casting their eyes backward for the last time at everything familiar, looking out to sea with dread and anticipation at the beginning of a dangerous journey to unknown lands on the other side of the world. I think forward to descendants entering the airlock of a starship for the last time, at the start of a foolhardy journey to a new and hopefully hospitable planet somewhere in the arm of a spiral galaxy… And I think of where we are at in these present days of confusion.

Transparently, the designs of corporate capitalism are departing from that sphere which can embrace average people. Money as a measure of wealth, by which in this paradigm worth is measured, is being sucked at an ever increasing rate into a tiny vortex beyond the useful reach of all but a few, and is thus destroying its own worth as a store of value (Reuters, January 19, 2016: "World's richest 1 per cent own more than the other 99 per cent put together: Oxfam report"). Where money is degraded as a store of achievable value, then alternate things fill that store, as they previously did in other times and places.

Value can be stored in infinite ways, from shared warrior fantasies (Daesh), to magnifying ideas of family honour (the poor in South Asia and the Middle East), to pride & reputation in skilled work (artisans) to conforming with peer fashions (teenagers) … and so on. Only some of these value stores are transmissible to others, let alone across generations. Few of them have the power to bring diverse peoples together over time into complex enterprises as money has.

The long-term disappearing accessibility of wealth to people around the world does not occur uniformly. Rural to urban migrants in Africa or Indonesia or Vietnam may see their life chances improving dramatically for a time as traditional factories are moved from high cost jurisdictions like the United States to take advantage of relatively cheap labour. Yet this boost may last less than a generation. There may be little reason for an automated American factory to establish in Vietnam in order to sell back to America if mass labour costs are taken out of the equation.

China, which has recently hosted the largest rural to urban migration in human history on the back of being “the world’s factory” is now entering a more mature stage of the consumer cycle. Local expectations and costs are soaring, national finances are teetering, and previously dispersed, uneducated rural peasants are suddenly and potently concentrated in large urban centres, unemployed in large numbers, and together with surging numbers of unemployed university graduates are forlornly demanding ”a stable, prosperous career”. China has more than 500 “mass incidents” of violence each day of the year, contained by an internal paramilitary police force with a budget larger than the national army. This combustible mix is a harbinger of similar situations worldwide.

Clearly we are on the cusp of a new paradigm for the conduct of human affairs since the old paradigm is apparently self-destructing. The outline of this new emerging civilizational paradigm remains obscure, so a study of its possibleshape or shapes is rather urgent.

3. Subsistence at a higher level

Except for tiny groups of courtiers, servants, soldiers and artisans, most people for most of recorded history have been subsistence dwellers, growing or gathering just enough to stay alive, with any small surplus snuffled by the mafia-like courtiers etc just mentioned.

The global industrial revolution set up a paradigm of consumer capitalism, where the mass of people both worked as units of production and earned sufficient surplus to consume the products of production, thus setting up a virtuous cycle. With clever re-education through marketing, populations were persuaded and motivated to diversify and increase their consumption, thus increasing demands for production. The communist experiment of removing money as a motivator in this cycle failed dismally by comparison with the capitalist design.

The core problem emerging at the moment is that the mass of people are less and less required as units of production. Therefore they cannot earn a surplus to consume with, and are more and more dependant upon the largess of the state to maintain minimal levels of survival. The breakdown is illustrated most brutally in the United States of America where tens of millions of people, although officially “employed” no longer have the industrial bargaining power to be rewarded with a wage sufficient for survival. Forty-six million of them need food stamps from the state in the world’s “richest” country (Berry 2015).

All kinds of minor service businesses have mushroomed to soak up some of this surplus labour just described, but in the end these service businesses can only mitigate a proportion of the larger employment problem for general populations.

4. Profit is degrading as the main arbiter of monetary value

It appears that two major things will have to change in current cultural values if we are to have an economically sustainable future. Firstly, the current capitalist systems (they come in various flavours) are all founded on the idea that the greatest monetary rewards must go, pyramid style, to those who are most responsible for the extraction of profit from production: that is, the owners of capital and their managers, together with those who wield the greatest powers of coercion. We have seen that this system is becoming unsustainable, even though for most it still seems to be the only imaginable system.

Secondly, those who do not contribute directly to profit from production are deemed to be of lesser monetary worth, regardless of their education or abilities or roles in community preservation. For example, human services workers such as teachers, nurses, fire fighters etc, all of whom require an unusual personal commitment to do their jobs well, do not make the A-list of highly rewarded careers. The main restraint on the devaluation of these “non-producers” are some, like medical doctors, who can trade on the personal fears of the population, or others who are able to assemble a degree of group pressure through trade unions. At the bottom of the pile are those who for whatever reason, do not contribute to for-profit business, and have no niche in service industries. These individuals may be pitied, despised or condemned.

5. Opportunity and Motivation – two drivers of enterprise

The power of money has been to motivate vast numbers of people with diverse interests to cooperate in countless enterprises, some of fantastic complexity and spanning the globe. The mechanisms which provided the opportunity for enterprises to proliferate in this manner, unmatched in prior human history, have been a) the liberation of ideas from many constraints of religious and traditional conformity, and b) the skills arising from ever multiplying technological mastery since about the 17th Century.

However, countering these forces of change, we see that global elites have conspired with increasing success to capture and monopolize all sources of capital, undermine the stability of labour and sequester their own control within “security states”. If I can cannibalize a quotation from my own paper, “The Problem of Work and the Rise of the Precariat” (May 2015) :

The permanent loss of jobs which has been occurring in countries like the United States and Australia stems directly from a corruption of political values which accelerated from the 1970s. This understanding is becoming fairly widespread amongst the educated public (though it is probably not grasped widely enough to sway elections). For example, I don’t happen to agree with all of the views of Paul Craig Roberts, who was Assistant Secretary of the Treasury for Economic Policy during the Reagan presidency. However he describes the ongoing destruction of employment futures quite succinctly:

The George W. Bush tax cuts have nothing to do with supply-side economics. The Bush tax cuts were nothing but a greedy grab, but they are not a significant cause of today’s inequality. The main causes of the unacceptable inequality of income and wealth in the US today are financial deregulation and the dismantling of the ladders of upward mobility by the offshoring of manufacturing and tradable professional service jobs. The wages and salaries denied to Americans are transformed into corporate profits, mega-million dollar executive bonuses, and capital gains for shareholders. Financial deregulation unleashed massive debt leverage of bank depositors’ accounts, backed up with Federal Reserve bailouts of the banksters’ uncovered gambling bets. Neither tax increases nor reductions can compensate for these extraordinary mistakes. (Roberts 2014).

Fortunately there is no reason to believe that opportunity and motivation can be permanently restricted and closed off by the failing paradigm of corporate capitalism. To take an analogy from scientific advancement, as one paradigm, such as Newtonian physics, encounters insoluble contradictions, a search begins for new paradigms which better account for known conditions, for example general relativity in physics, and quantum mechanics (Khun 1962, 2012). Let us consider two apparent deviations from this paradigm of corporate capitalism, a) the so-called “sharing economy”, and b) not-for-profit organizations.

6. The sharing economy

“The sharing economy” as a phrase is a clever bit of marketing blah to describe, I suspect, a new kind of arbitrage. The essence of the sharing economy is to network groups of people who have hitherto lacked the wherewithal to cooperate in some enterprise. The Internet itself is the mother of all sharing economy designs, but the process of monetizing that sharing is where things become interesting. It turns out that the most potent kind of “sharing” is peer-to-peer sharing amongst collections of individuals who would not normally think of themselves as operating in a business environment. The potency derives from the sheer number of such individuals – potentially the whole human population – and the diversity of their interests. For many of these newly networking individuals, money is only incidental to their interests. The dating and hook-up site, Tinder, for example is a magnet for those seeking consenting sex. Meetup.com, where people also arrange face to face meetings but in groups, covers every imaginable interest from bush walking to real estate promotion.

The big money in the sharing economy (this is the important bit) accrues to those who are able to imagine possible interest groups and provide tools – usually online virtual tools – to bring such interest groups into being. It turns out that worldwide there is such a vast array of possible interest groups that the tools they require are also proliferating into categories, to such an extent that early definitions are becoming hard to maintain (Botsman 2013).

What is becoming rapidly apparent however is that the same tendencies to oligopoly or monopoly which characterise corporate capitalism are embedded in the arbitrage of online networks. Network controllers in the sharing economy are rarely interested in sharing their control of the system. Think of eBay, or Airbnb, or Uber, or Udemy or Meetup.com, or a raft of others. Typically they have mushroomed into corporations with a minimum of physical presence, but amazing levels of capitalization from investors seeking el Dorado from a wing and a prayer.

A significant number of these network controllers invest heavy funds worldwide in lobbying governments for favourable laws, and in fighting legal challenges where they have crossed traditional commercial boundaries. Some of them may be around for the long term, whereas others might be superseded themselves by technology. For example, if self-driving cars take over cities rapidly (as corporations like General Motors are already plotting) then Uber’s rationale will begin to look rather sick.

In spite of the rapid concentration of network control into relatively few hands (mostly in America, as well as China where Americans are locked out) it is true that vast numbers of ordinary people are finding that they can create personal income streams by tapping into particular monetized networks. Almost anyone with a spare room or a driveway can suddenly make extra dollars, courtesy of outfits like Airbnb. The number of eBay businesses, from mico to macro, is astounding, but so is the buyer base (159 million registered active users in 2015). Normal business startups have an extremely high failure rate (80% failure within the first 5 years is a commonly cited figure), and there is no doubt that vast numbers of these networked business dreams also come crashing to earth. However, the cost of crashing and relaunching online may also be far less than in a bricks and mortar environment.

Wherever large numbers of people become organized in new ways, there are social, cultural and ultimately political consequences. That the emergence of the sharing economy is co-temporal with crises in traditional corporate capitalism, and the casualization of large sectors of the workforce, not to speak of the elimination of careers through automation, suggests that a major realignment of public interests is underway. Government institutions take time to adapt to changes like this, both in terms of service and effective taxing. Likewise, a study of news media will quickly show that the stories and events battled over daily reflect journalistic habit about where news is to be found, meaning where it was found a generation ago, far more than major population involvements in things like the sharing economy and mushrooming not-for-profit undertakings.

7. The surprising world of not-for-profit occupations

a) The charity stream

Charities preceded the industrial revolution. In fact there is scarcely a religion which does not enjoin its followers to earn virtue by giving alms to the poor. For all of recorded history the rich have salved their uneasy consciences by throwing scraps to the downtrodden. A common pattern in heavily class structured societies to this day in so-called power marriages is for the male to be a ruthless predator while his wife through charity work passes for an angel of mercy.

Even in traditional village life there were always those known willing to help out when misfortune struck others. Mutual assistance amongst the poor themselves, as well as to strangers, has an ancient history in many cultures (though not all cultures).

As peasants flooded into new cities in the early stages of the European industrial revolution traditional patterns of charity struggled to cope with the scale of new needs. It was the arch conservative, Otto von Bismark in late 19th Century Germany who hit on the idea that threats of mob rebellion would be best subdued by the state stepping in to provide a minimal guarantee of welfare to the working poor. Thus the welfare state was born and the terms of its operation have been a point of contention between the conservative and more the liberal minded ever since.

In spite of the welfare state, the original motives for charity were never quelled. On the one hand, religious organizations have always used charity as a potent tool to recruit followers. Without any such ulterior motives, very large numbers of middle class people in Western societies have used a part of their disposable incomes, and a part of their new found leisure time to give over to voluntary welfare activities. (The idea is also gradually catching on in East Asia). These many voluntary activities have in turn inspired the formation of organizations to channel and amplify the work of individuals. Business and political leaders, wishing to burnish their credentials as “good citizens” are typically found on the management boards of such not-for-profit charity organizations.

b) The self-help stream

The newly urbanized farming folk of 19th Century England and Europe, though treated as clods by the aristocracy, of course embodied the full range of human potentials. The sharpest amongst them quickly realized that the road to riches and a better life lay through education. Eventually, via political action, that led to universal free primary, then secondary education. However there also soon formed “mechanic’s institutes” and “schools of art” and “worker’s educational associations”, dedicated to the ideal of raising the standards of public knowledge. These organizations were dynamic in their aims and activities, like many of the schools and universities which followed, but also run on a not-for-profit basis. The idea of organizations formed for the common good also gave rise public health movements, and eventually hospitals for everyone, again operating with the aim of breaking even financially, but not driven by a profit motive.

On the level of daily economic activity, the model of capitalist industry runfor profit found itself challenged by the NFP cooperative movement. Cooperatives were established in every sphere, amongst farmers, amongst collections of retailers, in worker-owned factories and so on. The law soon had to be adapted to recognize cooperatives as a accepted form of business organization, and of course this still holds. Nevertheless the core political powers and control of public media remained in the hands of a capitalist elite almost everywhere, so that the commercial space for cooperative type businesses rarely became a significant threat.

From the perspective of the 21st Century, we now know that the founding ideals of 19th Century not-for-profit social and economic organization were often subverted and destroyed by the politically ambitious. The most disastrous detour from these idealistic origins was communism, which when translated into the turbulent political environments of Russia, then China and other places, came to occupy a political space almost indistinguishable from fascism. So white becomes black, black white…

c) Not-for-profit activities in contemporary Australia

Australia, where I happen to hang out, has long lived with comfortable stereotypes of recognized NFP activities. There are many charities receiving a constant stream of public donations. A certain level of cynicism prevails about the growing size and administrative costs of these organizations, but people still give. In addition, every suburb and town in the country has volunteers, young and old, who often find their voluntary activities a venue for friendship or a cure for loneliness.

It is broadly felt that public service organizations like schools and hospitals, emergency services etc should not operate on a for-profit basis, and there has been disquiet at an ideological political trend over the last couple of decades to privatized such undertakings on a large scale, even prisons. Nevertheless, this kind of stuff is never, on the whole, where media headlines have dwelled day to day.

Well, something has just changed dramatically. As usual, what has recently set the politicians wide-eyed is a dollar number. Some commissioned research has concluded that the NFP sector in Australia has magically become very, very big:

The number of Australian community sector organisations was most recently estimated at around 600,000 (Productivity Commission, Contribution of the Not-for-Profit Sector (2010)). Some 440,000 are smaller unincorporated organisations.

In 2007, the Australian Tax Office (ATO) classified 177,109 organisations as not-for-profits. Of those, the Productivity Commission report of 2010 regarded 59,000 as economically significant. According to the ACNC'sAustralian Charities Report 2014, religious organisations accounted for 29% of all not-for-profit organisations, followed by education and research organisations, which accounted for 18%, while 8% of organisations belonged to the health sector.

According to the ACNC'sAustralian Charities Report 2014, the sector reported income totaling $103 billion in 2013-14. Of this, $42 billion came from government grants, $6.8 billion from donations and bequests and $54.5 billion from other sources.

This figure was equivalent to 3.8% of gross value added (GVA) to the Australian economy. This figure is greater than the contribution to GVA of the agricultural, forestry and fishing industries (2.4%) and the information, media and telecommunications industries (3%)”. [OurCommunity.com.au 2014]

The significance of these numbers is not simply in dollars, but in the number of people involved. These are people of all kinds – good, bad or indifferent – and at all levels of sophistication. What distinguishes them from the regular workforce is that their time is NOT involved in activities whose ultimate objective is to make money for another class of persons, the owners of capital. This means that their frame of reference in decision making, and their motivations, only partly overlap with those found in for-profit organizations. For example, NFP undertakings will mostly not be driven to minimise the participation of human labour, and turn to automation wherever possible. In the present atmosphere of febrile panic about impending job losses through automation, this gives NFPs great potential importance.

Jamie Love has spent years battling global drug companies, unshakable in his belief that even the world’s poorest people should have access to life-saving medicines. Is it time that our own government listened to him?". [yet another example of a contest with the values of multinational corporations, and the defences their agents deploy]. The Guardian online @ http://www.theguardian.com/society/2016/jan/26/big-pharmas-worst-nightmare

Mason, Paul (17 July 2015) "The end of capitalism has begun – Without us noticing, we are entering the postcapitalist era. At the heart of further change to come is information technology, new ways of working and the sharing economy. The old ways will take a long while to disappear, but it’s time to be utopian". [This is a must-read, whether you agree with Mason's conclusions or not] The Guardian online @ http://www.theguardian.com/books/2015/jul/17/postcapitalism-end-of-capitalism-begun

May, Thor (2014) "The Problem of Work and the Rise of the Precariat". [precariat = precariously employed people] [essential reading to set a context for the present article]. The Passionate Skeptic website online @ http://thormay.net/unwiseideas/WorkProblem.htm

Towell, Noel (January 23, 2016) "Off the hook: Centrelink's 22 million unanswered calls". [Centrelink is the Australian Commonwealth Government's employment and welfare agency, including pensions. It is the largest not-for-profit organization in the country, servicing millions of vulnerable clients. Over the last several years it has entered into a spiral of management and operational failure that points to political incompetence and perhaps ill-will at the highest level in both major parties. It's shopfront staff are typically unavailable to consult in person, it's online access collapses constantly, and it's phones go unanswered or require waits of up to 90 minutes to reach call centre staff who know little. The financial and social costs of this failure are enormous] Canberra Times online @ http://www.canberratimes.com.au/national/public-service/off-the-hook-centrelinks-22-million-unanswered-calls-20160122-gmbrnp.html

Wikipedia (2016) "Labor Spy". ["In 1993, there were 7,000 attorneys and consultants in the United States who made their living busting unions. The war against unions is a $1 billion-plus industry"] Wikipedia online @ https://en.wikipedia.org/wiki/Labor_spy

Professional bio: Thor May has a core professional interest in cognitive linguistics, at which he has rarely succeeded in making a living. He has also, perhaps fatally in a career sense, cultivated an interest in how things work – people, brains, systems, countries, machines, whatever… In the world of daily employment he has mostly taught English as a foreign language, a stimulating activity though rarely regarded as a profession by the world at large. His PhD dissertation, Language Tangle, dealt with language teaching productivity. Thor has been teaching English to non-native speakers, training teachers and lecturing linguistics, since 1976. This work has taken him to seven countries in Oceania and East Asia, mostly with tertiary students, but with a couple of detours to teach secondary students and young children. He has trained teachers in Australia, Fiji and South Korea. In an earlier life, prior to becoming a teacher, he had a decade of finding his way out of working class origins, through unskilled jobs in Australia, New Zealand and finally England (after backpacking across Asia to England in 1972).